Trump blows up fashion supply chains, with Turkey, Morocco and Egypt emerging as new ‘hubs’

Madrid – “Liberation Day” arrived, as the president of the US, Donald J. Trump, liked to call it. The trade war that the leader of the US promised to "correct" via tariffs, for what he considered to be abusive and non-reciprocal trade relations and have ultimately affected the economic and industrial performance of the US, has finally broken out. This day appears to mark a profound turning point in trade relations between the country and its trading partners and clearly threatens to completely redraw the map of sourcing for fashion companies.

In an attempt, from the perspective of the US leader, to correct what he has described as “structural asymmetries” that have driven “the broad and persistent annual trade deficit of goods of the US”, Trump announced on Wednesday, April 2, 2025, the imposition of minimum tariffs of 10 percent on all imports from all of the US’ trading partners. However, this rate will increase for a total of 57 trading partners, by a specific percentage for each one. This import charge will remain in place until it is determined that the conditions of reciprocity and the detrimental effects identified by his administration that have generated the country's bilateral trade relations with its partners “are met, resolved or mitigated”, according to what is detailed in the executive order.

According to details, Trump declared an economic “national emergency” in the order, citing an “unusual and extraordinary threat to the national security and economy of the US” caused by the “lack of reciprocity in our bilateral trade relations”, as well as “the disparity of tariff rates and non-tariff barriers, and the economic policies” imposed by “the US’ trading partners”. These measures “suppress wages and domestic consumption”, and as a whole, “constitute an unusual and extraordinary threat to the national security and economy of the United States”.

From “additional” tariffs on China, the EU, Bangladesh, Vietnam and India, to “minimum” tariffs for Turkey, Morocco or Egypt

Through that “special” list of trading partners particularly affected by this new protectionist policy, the Trump administration hopes not only to boost the manufacturing industry in the country, but also to encourage job creation and for US multinationals’ research and development investments to refocus on the US rather than in other countries such as China. Here, between 2003 and 2017, investments grew by an average of plus 13.6 percent per year compared to plus 5 percent in the US — according to data released by the White House — making these regions the main fashion garment producing countries in the world. Conversely, a number of other countries, also producers but with a considerably lower weight, such as Turkey, Morocco, Egypt and Guatemala, have been “freed” from any “exceptional” tariff, allowing their products, when marketed in the US, to only bear that minimum “universal” tariff of plus 10 percent decreed by the new US administration.

In contrast to this competitive “advantage” with which garments made in these regions will now compete, are the cases of China, the European Union, Bangladesh, Vietnam and India. More specifically, in the case of China, the world's leading exporter of fashion garments (164,743 million dollars in exports) according to the latest estimates from the World Trade Organization (WTO) from 2023, the US has agreed to impose a new tariff of 34 percent on imports of Chinese products into the country. For the European Union (162,529 million dollars), the second largest exporter of clothing in the world according to the WTO, a general tariff of 20 percent has been imposed on all imports. Bangladesh (47,386 million dollars), the third largest exporting country of clothing, will face tariffs of 37 percent, while Vietnam (31,039 million dollars), the fourth largest exporting country, will have tariffs of 46 percent.

Also noteworthy is the tariff of 27 percent agreed for India (15,366 million dollars), and the 28 percent imposed on Tunisia (2,673 million dollars), a country with an equally flourishing textile industry, which sees its competitiveness hampered compared to other countries in the Mediterranean region, such as Morocco, Turkey and Egypt already mentioned. Similarly, Panama and other Central American countries now see their positions strengthened as clusters for the production of fashion garments.

In relation to these, and to put their positions equally in context, Turkey (18,729 million dollars annually in clothing exports) is, according to the latest WTO data from 2023, the fifth largest exporter of fashion garments in the world, behind Vietnam and above India. Behind Turkey are countries such as Pakistan, which has been imposed a tariff of 30 percent; Cambodia, with a new tariff of 49 percent; Mexico, which maintains its tariffs at 25 percent; Sri Lanka, with tariffs that have been agreed to raise to 44 percent; the UK, which gains an advantage with minimum tariffs in that new general minimum rate of 10 percent; and Malaysia, which is now affected by a rate of 24 percent.

Morocco, despite far below compared to other garment exporters (3,780 million dollars annually in exports), may be able to try to climb and value its status as a ‘hub’ for textile production by taking advantage of a new minimum tariff of 10 percent with which its garments will be taxed when they arrive in the US. This competitive advantage, in addition to Turkey and Morocco, will be sought by other producing countries, far from the large production volumes that are mainly handled in Asia, such as Egypt (2,450 million dollars in clothing exports), El Salvador (1,873 million dollars), Guatemala (1,597 million dollars) or Panama (1,248 million dollars).

Full list of additional import tariffs imposed by the United States, by country